What a difference one-tenth of a percentage point can make.
Economists expected consumer prices to rise 0.4% from March to April. When the numbers came out on May 15, the actual change was a 0.3% increase, a sign inflation is cooling in the US.
This modest undershoot jazzed the stock market, improved the interest rate outlook, and gave President Biden new hope for an economic tailwind in the home stretch of this year’s presidential election.
Every president takes credit for what is going right, and Biden certainly needs all the help he can get in his reelection battle. Biden's approval rating has been stuck at around 40% for two years, and polls continue to show Republican challenger, four-time indictee Donald Trump, has an edge in key swing states.
Inflation is now running at 3.4% year over year, still far above the Federal Reserve’s target of around 2%. But many economists think things are bound to get back to normal.